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A Clean Electricity Performance Program is Reliable and Achievable

The Clean Electricity Performance Program builds on what’s working and pushes utilities to do more, while benefiting grid reliability.

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100% Clean Power Climate in Congress
President Biden speaks at the National Renewable Energy Lab in Colorado on September 14, 2021.
President Biden speaks at the National Renewable Energy Lab in Colorado on September 14, 2021. © 2021 NREL/Flickr cc by NC-ND 2.0

Note: This blog is part of a three-part series (done in partnership with NRDC) on a Clean Electricity Performance Program and why it will drive an achievable, reliable, affordable transition to more clean electricity. If you’re looking for a quick primer on exactly what a CEPP is and how it works, read this first. This blog explains why a CEPP is reliable and achievable. And stay tuned for the next blog in the series, detailing why a CEPP is affordable for utility customers

Background: What Does a Clean Electricity Performance Program (CEPP) Do?

CEPP incentivizes every utility electricity supplier across the country to grow their share of carbon-free energy each year, from 2023-2030. Utilities that increase the clean energy they supply by a certain percentage each year will receive a federal grant that must be used to benefit consumers and workers. To make these federal investments most effective and ensure the program’s integrity, each utility that does not achieve this annual rate of clean energy growth must make a payment to the federal government for every megawatt-hour (MWh) that it falls short.

Through this system of carrots and sticks, electric utilities will make rapid, steady progress toward a carbon-free electricity grid; driving clean energy development and job growth, reducing pollution for communities and the climate, and protecting customer energy bills.

And better yet? Independent economic analysis conducted by the Analysis Group found that implementation of a CEPP policy could expand the U.S. workforce by nearly 8 million jobs and the U.S. economy by nearly $1 trillion by 2030.

CEPP Will Protect Grid Reliability

Bottom line: CEPP will protect grid reliability while driving an effective, technology- neutral transition to more carbon-free power. 

This clean power transition is achievable and will not adversely affect grid reliability. In fact, moving to more carbon-free electricity is essential for reducing the risks that climate change-driven disaster events are wreaking upon America’s electric grid. 

In 2021 alone, wildfires and extreme heat waves in the American West knocked out power for millions, and killed hundreds in the process. Three weeks after Hurricane Ida ripped through the Gulf Coast, at least 10,000 people in Louisiana were out of power. In 2020, according to NOAA there were 22 billion-dollar weather disasters, including droughts, severe storms, hurricanes, and wildfires. While the challenges of rapid system transformation are real, we have the resources we need to maintain reliability, under the imminent threat of ever-worsening weather if we fail to respond to the climate crisis. 

A meta-analysis of power sector modeling conducted by Energy Innovation shows that CEPP’s clean electricity goals would not affect grid dependability. This analysis examined seven studies with rigorous reliability stress tests of the grid under variable weather and demand conditions—including two studies that tested the grid in every hour of multiple years of weather data. Many of these studies were also conservative, not accounting for reliability-enhancing measures like demand response, emerging technologies (e.g. long-duration energy storage), and using excess renewable energy for uses in other sectors (e.g. electrolyzing green hydrogen).

In addition, rigorous new modeling from the DOE, as part of its Solar Futures Study, found that a rapid transition to clean electricity over the coming decade is achievable while maintaining reliability, keeping costs low, and expanding the energy workforce. The National Renewable Energy Laboratory (NREL) also demonstrated the reliability of the grid under 60% wind and solar energy–which, paired with existing nuclear and hydro energy, could equate to roughly 80% clean electricity.

The rapid transition to a cleaner electricity system does not mean a complete abandonment of complementary firm dispatchable electricity generation resources. Several studies, including The 2030 Report, find that relying on existing “firm” capacity, along with a rapid expansion of battery storage capacity, can ensure sufficient resources to meet peak demand. 

CEPP is Ambitious and Achievable

Bottom line: CEPP builds upon utilities’ existing clean energy commitments, as well as state policies, but demands and empowers more rapid progress. 

CEPP builds upon—but demands more than—utilities’ existing clean energy commitments and state policies. Annual clean power growth of 4 percentage points (p.p.) is achievable. Some utilities, but not enough, are already planning to achieve 3 p.p. per year. CEPP federal grant support and extended clean energy tax incentives will empower utilities to make more rapid progress. This means more and faster job creation and pollution reduction in every region of the country. 

Some utilities have cast 4 p.p./year as too difficult to achieve—but these arguments ignore the growth of clean energy, the proven success of state policies and, sometimes, even utilities’ own public commitments. 

Other voices have questioned whether the CEPP is just a giveaway to utilities for what they are already doing. That too is inaccurate. The 4 p.p. annual clean energy trajectory exceeds the highest-ever U.S. clean power growth in a single year—2.3 p.p. in 2020. CEPP grants are provided only for those utilities that reach 4 p.p., and are paid only for clean MWh that utilities add above 1.5 p.p. in growth. 

These thresholds are important: CEPP does not pay utilities for what they are already doing, nor does it demand more than can be achieved. CEPP hits the sweet spot by being ambitious and achievable, unlocking a rapid transition to more carbon-free energy with a technology-neutral policy that will create jobs and maintain grid reliability throughout the country.  

Sample of vertically integrated utilities planning to add > 2.5 P.P. / year in new clean energy this decade.

Clean energy growth is achievable, as demonstrated by a number of utilities’ clean energy commitments (Sample of vertically integrated utilities planning to add > 2.5 P.P. / year in new clean energy this decade.)

CEPP Builds on Successful State Policies

CEPP builds upon state policies with a proven history of success driving economic development and clean energy deployment. Ten states, Washington, D.C., and Puerto Rico have enacted into law requirements that their electric utilities must achieve 100% clean electricity (see Figure 3). Over thirty states and territories, beginning with Iowa nearly 40 years ago, have implemented Renewable Portfolio Standards (RPS) requiring utilities to increase their use of renewable energy each year.

“CEPP builds upon state policies with a proven history of success driving economic development and clean energy deployment.”

Across the country, states have adopted policies that will meet or exceed 80% clean electricity by 2030, most with Clean Electricity Standards (CES). CEPP’s federal investments would help lower the costs of state policies and ensure their success. By 2030, Washington state law requires the power sector be 80% clean (and fully carbon neutral), and Maine requires 80% renewable power. Both Oregon and Colorado require an 80% reduction in electricity carbon dioxide emissions by 2030. In September 2021, Illinois enacted new legislation that would achieve over 80% clean electricity by 2030, provided the continued operation of the nuclear power plants that today provide much of the state’s carbon-free power. D.C. requires 100% clean electricity by 2032. Meanwhile, CA, HI, NM, NY and VA laws all require 100% clean by 2040 or 2045, which puts their states on track for significant clean electricity growth by 2030. A number of other states have set 100% clean electricity goals via executive order or non-binding legislation, including Wisconsin and Nevada. 

Experience Shows Utilities Meet Ambitious Clean Energy Policies

When states and the federal government have put policies or investments for utilities into practice, utilities have stepped up to transform their electricity portfolios. State RPS/CES policies, along with federal tax credits, have driven renewable energy growth in the U.S. And individual utility compliance with clean electricity performance standards is extremely high—approximately 96%, historically. The vast majority of utilities meet 100% of their annual obligations. 

These state policies, in many cases crafted with broad support from labor, utilities, businesses, climate groups, and environmental justice communities, show that clean electricity is imminently achievable and popular. CEPP would help these states move even faster, and will maintain lower electricity bills.

Take Action Now

We stand at a really critical moment. If federal lawmakers pass a well-designed CEPP and robust complementary investments this year, it could put the U.S. on a path to 80% clean electricity by 2030. This program is critical for our 100% clean energy future.

Congress must act now to pass the Clean Electricity Performance Program and the other critical climate investments in the Build Back Better Act. Call your members of Congress right now and let them know you support a CEPP. It only takes a minute, and we’ve got a script ready if you need it. Make the call now.

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